This post seems to have caused more confusion than it has helped, so I removed this pending further research.

Dan



Edited 2 time(s). Last edit at 01/21/2010 10:59AM by Dan Ertz.

I think I have this right, but make sure that your invoice is before taxes, if the FET is included then you want "Price/(1+10%)*10%"

The FET on a blank you charge a total of $100 is $9.09.

Jon

Jon Bial Wrote:
-------------------------------------------------------
> I think I have this right, but make sure that your
> invoice is before taxes, if the FET is included
> then you want "Price/(1+10%)*10%"
>
> The FET on a blank you charge a total of $100 is
> $9.09.
>
> Jon

Jon,

The equation in your post is dividing the price by 1.10 and then multiplying it by 10%. The correct FET for a $100 rod is $100 x 10%= $10. Or are you calculating this to remove a 10% sales tax from the total before you calculate the FET?

While state tax codes may vary as to if you should apply the FET before, or after sales taxes, I don't think there are any retailers out there that don't just hide the $10 or 10% FET in the rod's sale price and then charge sales tax on that total.

Dan

10% works if you are selling to a reseller, but it won't work if you are selling to the end user. The FET rate for sales to the end user is 10% of 60% ... better displayed as 6%. That figure is derived through the "constructive value rule" allowed by the IRS for FET calculations. The $10 cap is correct, however. For end user sales, the "calculation cap" is $166.66, not $100.00 on end user sales.

never mind

Scott Sheets
www.smsrods.com



Edited 1 time(s). Last edit at 01/21/2010 07:36AM by Scott Sheets.

Jim,
I thought I had this licked, but your post confuses me. If I have a rod that costs $500 and I sell to a customer that is the end user and is out of state, my final is $510, correct? If I sell to a retailer, my final is $500, and the retailer is responsible for FET, correct?

Kevin

This is not correct.

If you are selling to the end user (the fisherman) the tax is 10% of the selling price, or $10, whichever is less.

If you are selling to a reseller (tackle shop, sporting goods store, etc.) the tax is 6% of the selling price or $10, whichever is less.


...................

So on a $500 rod, it would be $10 for both reseller and end user. Correct?

This is what I have ben doing all year with the gov't.

Kevin

Yes, the tax is capped at a maximum of $10. So either 10% or 6% of $500 exceeds the $10 cap.

AFFTA lobbied for this cap in an effort to help domestic makers of premium rods better compete with the lower price import rods.


............

Tom,

I edited my original post to include the following.

"...for anyone using Excel to calculate their invoices for sales to "end users" (fishermen) here is a formula to calculate a rod's FET. (THIS FORMULA DOES NOT APPLY FOR SALES TO RE-SELLERS.)"

I can write an additional version of the formula "For sales to Re-Sellers" if you like, or maybe it would be better to just delete this post altogether?

Dan

Tom Kirkman Wrote:
-------------------------------------------------------
> This is not correct.
>
> If you are selling to the end user (the fisherman)
> the tax is 10% of the selling price, or $10,
> whichever is less.
>
> If you are selling to a reseller (tackle shop,
> sporting goods store, etc.) the tax is 6% of the
> selling price or $10, whichever is less.
>
>
> ...................

Now I'm confused. The article in the library says this...

Here's how it works - lets say you sell a custom rod to your customer for $300. Instead of figuring a 10% tax of $30, you would create a Constructive Sale Price by multiplying $300 by 60% (300 x .60), which is $180. The tax (10%) is now due on that amount ($180). Your customer would be charged $300 for the rod, $18 for the excise tax, and any applicable sales taxes your state or county impose.

You may only take advantage of a Constructive Sale Price when selling to the end user. If you sell a rod to a reseller, someone who then sells the rod to another reseller or the end user, you must pay the 10% tax on your full selling price. Let's take a rod that you sell to a fishing tackle store for $150 and which they intend to sell to one of their customers. Your tax liability would be 10% of the full $150 (.10 x 150) which is $15. (The shop or store has now fulfilled their tax obligation and no further collection or payment by them upon selling the rod to a customer is required.)

Chuck,

Thank you. I swapped ends on the percent. It is 6% when sold to the end user and 10% when sold to a reseller.

............

Whew! I was afraid I screwed up. Thanks for clearing that up.

This is the proper formula with a basic if/else statement. If "cell" x .6% < 10, then cell x 6% is FET, else its $10. This is the simplest formula I have found to use and works well.

This assumes G15 is the subtotal of the rod.

=IF(G15*0.6*0.1<10,G15*0.06*0.1,10)

Dan,

I should have made it more clear

Price/((1+Tax Rate%)*Tax Rate)

For the 10 percent rate:
Price/((1+10%)*10%)

or simplified
Price/9.090909091

Now, you can layer this on top of Sean's formula for the appropriate rate on products where the FET is included in the price.

Jon

My formula is to the end user only, as I do not sell to shops. If you do, you will have to modify the formula and likely have two seperate cells OR set up another imbedded if statement where a cell's value either is equal to "SHOP" or "USER" and then set it up accordingly. Pretty complicated to do it this way, but it would work if you can figure it out. The good news is, you only must figure it out once, then set up teh cells you want to be editable and lock the sheet.